Commercial Landlord Insurance

The property owner or landlord, is responsible for arranging building insurance on commercial property that is rented out.

Under the terms of most commercial lease agreements, the landlord will often pass on the cost of building insurance to the tenant.

Theft and theft by tenant is covered under commercial property policies. However, most policy wordings state that there must be evidence of entry by “forcible or violent means” in order for a claim to be valid.

When offering their quote, the underwriter will look at the local crime map to analyse the crime rate in the surrounding area of the property. Should this be in a high crime area, an insurer may look to increase their excess or restrict cover. However, the stance on this can vary from insurer to insurer therefore as a broker we are able to search our markets and find a quote with a high quality of cover for a competitive rate.

Fire is covered under all commercial property policies, including when the property is unoccupied.

The very basic cover offered by insurers, in particular when a property is vacant, is for fire, lightning, explosion, and aircraft. However, it is important to note that explosion from fire is typically excluded and this is restricted to explosion of gas boilers, or gas used for domestic purposes. Subterranean fire is also excluded.

As defined by AXA in their policy wording, flood is defined as “the escape of water from the normal confines of any natural or artificial watercourse, lake, reservoir, canal, drain, or dam. Inundation from the sea. Rain-induced runoff. Whether resulting from storm or not.”

When considering whether to offer flood cover an underwriter will look at a range of factors. These include; The Environment Agency’s Flood Map; how far away the property is from a river, sea, or lake and; the history of previous flooding in the surrounding area. With these three factors in mind, they will decide whether to offer standard terms, increase the excess, or exclude flood completely.

A commercial property policy will provide essential flood and storm cover for the structure and landlords contents looking only to exclude damage in respect of fences, gates, or moveable property in the open.

Water damage caused by a burst pipe, also known as ‘escape of water’, is a cover often found on a commercial property insurance policy. Despite a common misconception that the pipe itself is covered under the policy, this is not always the case; however, instead, the damage arising from this escape of water is covered by the insurance. For example, a pipe suddenly bursts in your property and damages the floor and several appliances. The pipe itself would be excluded, but the material damage to the structure and contents would be covered by your insurance policy.

However, many policies offer ‘trace and access’ cover as part of their policy. This means that should there be some evidence that there is a water leak occurring, you may have to call someone in to remove plasterwork or floorboards to identify where this is coming from.  This can prove costly. Therefore this trace and access will cover the cost of locating the source of the leak, and any costs necessary in repairing and making good any damage caused in locating this. The main reason insurers offer this cover is to find the leak quickly, therefore avoiding further widespread damage and minimising claim costs both for yourself and them as a result.